Paid for two months at once

nathansimmo

I started a job last year on a contract until the end of March 2022 where I would be paid retrospectively for the last month based on a time sheet. This meant on April 14th I would’ve been paid for March.

This month, I started a new year-long contract with the same company, where I am now paid for the current month, without a time sheet.

Due to this, when I received my April payslip, I received two months pay in one. This meant that I paid tax, national insurance, and student loan repayments as if I had earned about double my regular salary for one month, not two separate months.

If each month’s pay was separate, I wouldn’t have paid any student loan, and most of my pay check would fall below the thresholds for tax and NI, rather than having a whole extra month’s pay on top which is entirely over the threshold. 

Overall, this has resulted in me paying about £350 more than if I would have received these payslips separately. Is there anything I or my employer can do to rectify this or do I have to just settle for paying as if it was all one month’s pay?

Grumpy_chap

How does the £350 split between tax, NI, student loan?
Income Tax will correct itself during the tax year.
NI may work out as more or less, depending on the specifics.
I can't comment on the student loan.

nathansimmo said:

I started a job last year on a contract until the end of March 2022 where I would be paid retrospectively for the last month based on a time sheet. This meant on April 14th I would’ve been paid for March.

This month, I started a new year-long contract with the same company, where I am now paid for the current month, without a time sheet.

Due to this, when I received my April payslip, I received two months pay in one. This meant that I paid tax, national insurance, and student loan repayments as if I had earned about double my regular salary for one month, not two separate months.

If each month’s pay was separate, I wouldn’t have paid any student loan, and most of my pay check would fall below the thresholds for tax and NI, rather than having a whole extra month’s pay on top which is entirely over the threshold. 

Overall, this has resulted in me paying about £350 more than if I would have received these payslips separately. Is there anything I or my employer can do to rectify this or do I have to just settle for paying as if it was all one month’s pay?

nathansimmo

Compared to if I split the amount in half and taxed each half, which would be roughly the same as if I got paid in separate months, £105 extra NI, £115 tax, and student loan was £126, which I wouldn’t have paid any of in a normal month’s pay.

chrisbur

As I understand it you have had two paydays added together and will then continue being paid each month.  This will mean that in the tax year you will have had thirteen paydays.
The tax allowance given is for the year and is split into 12 parts for anyone paid monthly so if for any reason you are paid thirteen paydays one of them has to go without a tax allowance.  Your tax will be as before next month when you get a normal payday but there will be no adjustment to what was paid this month, unless normal pay is under the monthly tax allowance, which it does not appear to be.
Regarding national insurance there are rules for anyone who receives two payments in one but to the best of my knowledge these only apply when one of the payments would normally belong in a different month eg holiday pay in advance or a missed month for a new starter.  As you will not have a month missed as a result of this payment I do not believe that these rules would apply in this case.
Regarding student loan have very limited knowledge here.  All I do know is that at the end of the year if your total earnings are under the figure for student loan repayment then you can claim a refund, but to get this your total earnings have to fall below the annual threshold. 
Threshold details here....
https://www.gov.uk/repaying-your-student-loan/getting-a-refund

nathansimmo

Thanks for your help, it looks like I won’t get the student loan payment back due to the annual threshold. 

Very annoying that this has happened though, I would rather have just continued being paid a month late as the only time I was ever effected by this was my first month where I got nothing, and I would’ve received my final payslip a month after I leave.

pjread

Other way of looking at it is you got that 'final month' now rather than 1/3/5/30 years in the future (or never if the employer folds); a big chunk of the 'extra' cost is student loan repayment (so you'll repay that a bit quicker then get the money "back" then), the tax will sort itself out over the year and while the NI is 'gone' ultimately you'll have more money in the bank than if you were waiting to get that last month at some indeterminate point in the future. 

chrisbur

I was having another look at these figures.  Originally I did not take a lot of notice of the tax figure as you said 
"most of my pay check would fall below the thresholds for tax and NI "  on a normal month.
This would mean that the extra you paid due to the doubling up was caused by you getting one allowance for tax/NI/SL
For example the allowance for NI is £797 after that you pay 13.25% so by not getting that second NI allowance you paid 13.25% of £797 = £105.60 or thereabouts.
Student loan similar but of course that does vary but all plans appear to have a higher threshold than the usual one for tax, so at the time did not bother checking the tax figure.

The figure you give for extra tax is £115 which working backwards if you take £115 as being the 20% tax on the lost allowance this gives an allowance of £575 which suggests quite a low tax code.  If this is the case and you are not aware of why this is it would be advisable to look into it, perhaps check your personal tax account.

calcotti

pjread said:

..a big chunk of the 'extra' cost is student loan repayment (so you'll repay that a bit quicker then get the money "back" then), ..

Many student loans are never paid off and if taht is the case the money will not be 'got back'. Nonetheless it is what it is.